Home Equity Calculator

Adjust the inputs below to see how your equity can change over time with a reverse mortgage.

Today15-Yr Forecast
Home Value$560,000$872,462
Loan Balance$25,000$66,165
Remaining Equity$535,000$806,297
ValueLoan

About This Calculation

This reverse mortgage Home Equity Calculator is built for Canadian homeowners. It shows how your home equity may change over time once you take a reverse mortgage. Adjust your home value, desired funds, appreciation rate, interest rate, and forecast period to compare your estimated future home value, projected loan balance, and remaining equity.

This tool forecasts your remaining equity over time. It differs from our Reverse Mortgage Calculator, which estimates your borrowing power. Put simply: that calculator answers “how much can I get?” while this one answers “what happens to my equity in the years that follow?”

The goal is to help you plan ahead and compare scenarios. Every figure is an estimate for illustration and education only. It is not financial, legal, or tax advice, nor a mortgage approval, appraisal, or lending commitment.

How This Calculation Works

The calculator projects your estimated future home value and growing reverse mortgage balance across your chosen time horizon.

Home Appreciation Projection

Your home value is assumed to grow each year at the appreciation rate you enter. A steady rate may allow your property value to outpace the rising loan balance, but property values can rise or fall and are never guaranteed.

Projected Loan Balance

Your reverse mortgage balance increases as interest accrues on the amount borrowed. Because regular payments are not required, interest is added to the balance rather than paid down.

Semi-Annual Compounding

Interest is assumed to compound twice per year, the most common structure for lump sum reverse mortgages in Canada. Some products, including certain variable-rate mortgages, may compound monthly.

Exact Calendar Years

The calculation uses exact calendar years, including leap years, so the projection reflects elapsed time as precisely as possible.

These methods are simplifications used for illustration. Your actual results may differ and should not be relied upon as a forecast of your real-world outcome.

Key Assumptions and Limitations

This Home Equity Calculator is an educational planning tool. Keep these assumptions in mind:

  • The default 3% appreciation is a planning assumption, not a prediction. We chose 3% because it sits within the Bank of Canada’s 1% to 3% inflation-control range, and it is reasonable to assume that home values, on average, may keep pace with inflation over the long run. For context, CMHC data on average absorbed homeowner and condominium unit prices in larger Canadian centres shows appreciation of roughly 5.72% per year between May 2020 and May 2026. Past performance does not predict future results, and you can adjust this rate to model your own scenarios.
  • The forecast horizon is illustrative. A reverse mortgage has no fixed term. The 15-year default is an illustration point, not a deadline.
  • The interest rate is held constant. In reality, rates typically reset with market conditions and lender policies at least every five years.
  • A one-time lump sum is assumed. Additional or recurring advances would change how the balance grows.
  • The funds shown are not guaranteed. Eligibility depends on borrower age, property value, type, and location. The tool starts at $25,000 and caps desired funds at 59% of home value. Use our Reverse Mortgage Calculator to estimate the advance you may qualify for.

Glossary of Reverse Mortgage Terms

Remaining Equity
The estimated difference between your home’s future value and projected reverse mortgage balance.
Home Appreciation
The assumed rate at which your property value grows over time. Property values are never guaranteed.
Reverse Mortgage Interest Rate
The rate used to estimate how your outstanding loan balance grows as interest is added over time.
Semi-Annual Compounding
Interest calculated and added to your balance twice per year, the most common method for lump sum reverse mortgages in Canada.
Time Horizon
The number of years used in the forecast. It is a planning illustration, since a reverse mortgage has no fixed end date.
Projected Loan Balance
The estimated future amount owed, including the original advance plus accrued interest.
Lump Sum Advance
A single, one-time withdrawal of reverse mortgage funds rather than gradual or recurring income payments.
FAQ

Frequently Asked Questions